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Anti-Deficit, Anti-Spending Groups Praise Mulvaney’s Pentagon Efforts

Anti-spending and anti-deficit groups praised Rep. Mick Mulvaney (R-S.C.), President-elect
Donald Trump’s pick for budget chief, for his record of cracking down on the Pentagon’s
use of war funds to pay for regular spending.

Mulvaney—who was chosen Dec. 17 to be director of the Office of Management and Budget,
the White House office in charge of the administration’s budgeting and regulatory
policies—has previously worked with Democrats on legislative language to restrict
the Pentagon’s use of Overseas Contingency Operations (OCO)
funds.

The fund began life in the early 2000s as an accounting mechanism meant to separate
funding for day-to-day Pentagon operations from paying for the wars in Iraq and Afghanistan.
But in recent years, Republicans have pushed to divert OCO funds to make up for shortfalls
in regular defense appropriations.

Because the OCO funds do not count against the annual defense funding cap, adding
them would not trigger the across-the-board spending cuts known as sequestration.
The OCO use has also led critics to call the fund a “slush fund” for defense hawks.

Mulvaney, who came to Washington in 2011 after defeating then-House Budget Committee
Chairman John Spratt (D-S.C.), pushed for a House amendment to codify OMB eligibility
criteria for Pentagon expenses to be paid for by OCO funds.

Challenged ‘Budget Gimmick.’

The amendment to the annual defense policy bill adopted in the House passed that chamber
in May, but it was left out of the final conference report. Still, Mulvaney’s efforts
to restrict OCO fund use drew praise from groups opposed to federal spending and increases
to the deficit.

“He was one a few House Republicans who took on the budget gimmick of boosting the
Overseas Contingency Operations account to get around the spending caps. He also took
on farm bill waste and was willing to work across the aisle to get rid of wasteful
spending,” said Steve Ellis, vice president of the anti-spending Taxpayers for Common
Sense, in an e-mail. “He won the ‘Mr. Smith Goes to Washington’ award from us last
year for his work in these areas.”

Taxpayers for Common Sense awarded Mulvaney a 91 percent rating in 2015.

Resistant to Tax Cuts?

“As a co-founder and leader of the House Freedom Caucus, Mulvaney has advocated deeper
spending cuts than House Republican leaders have agreed to, even if that meant shutting
down the government,” Bixby said in a blog post on the group’s website.

The House Freedom Caucus, whose conservative and libertarian Republicans have often
been a thorn in GOP leaders’
sides by advocating for more spending cuts, was also at the center of an unsuccessful
effort in 2013 to roll back the Affordable Care Act by setting the stage for a 16-day
government shutdown.

“In his quest to reduce spending he has not spared the Pentagon budget from scrutiny,
particularly the gimmick of using the [OCO fund] to avoid spending caps,” the blog
post said. “Some of these hard-line positions might prove difficult to maintain as
budget director where his job will require negotiations with his former colleagues
in Congress to push through the administration’s fiscal agenda.”

In his campaign, Trump advocated for a boost in infrastructure spending, more money
for the military and a tax overhaul that budget groups worry will lead to large budget
deficits.

Maya MacGuineas, president of the bipartisan anti-deficit Committee for a Responsible
Federal Budget, praised Mulvaney for his OCO stance, but was unsure how it would fit
into the Trump White House.

“Mulvaney has proven himself to be very concerned about not adding to the debt, and
principled in not tolerating budget gimmicks to do end runs around budget constraints,”
she said in an e-mail. “There is a real risk he will not show the same resistance
to debt-financed tax cuts, but it will definitely be good to have a deficit hawk at
the table who hopefully advocates for bringing the debt down, not up.”

To contact the reporter on this story: Jonathan Nicholson in Washington at
jnicholson@bna.com

To contact the editor responsible for this story:
Paul Hendrie at
phendrie@bna.com

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